Some of the more ‘traditional’ areas of infrastructure do not face such a positive outlook from a climate change perspective. Airports are linked to climate change through their symbiotic relationship with the airline industry which is GHG emission intensive. The potential impact on airports is threefold. A carbon price on aviation emissions may result in changes to passenger numbers due to the direct impact on the cost of air travel.
The indirect impact of reduced economic growth as a result of climate change may reduce discretionary travel. Finally, due to physical changes in the environment, for example the continued bleaching of the Great Barrier Reef, passenger growth may reduce and travel routes may alter. This is unlikely to be a direct issue for a number of years but passenger growth should be monitored.
The negative impact on GDP coupled with the heightened price of air travel may impact quite significantly on airlines and therefore airports. This impact will also depend on the carbon price and other regulation approaches. There are a number of strategies that may reduce these negative impacts such as income diversification within the airport and reducing the industry’s carbon footprint through the use of alternative fuels, more efficient engines and flight paths, shorter take-off and landing routes and passengers choosing to offset their emissions.
Toll roads may be an area of concern but there has been limited indication to suggest this to date. Given the GHG emissions produced by cars coupled with continued high oil prices, traffic numbers may reduce. Research has generally predicted that energy costs and climate awareness are only likely to impact on discretionary travel. It is unclear whether there will be additional investment in rail and other public transport infrastructure to aid in reducing society’s reliance on cars although this makes sense. The increased take up of hybrid and other types of low GHG emitting and lower cost vehicles may mean that traffic levels do not reduce meaningfully, therefore limiting the negative impact on toll roads.
Generally, the solutions available to reduce the impact of climate change on toll roads appear simpler than for airports. There are a number of opportunities in the renewable energy sector. These too are not without risks due to the early stage of the sector, particularly in Australia. There will be a number of technologies that may benefit greatly from climate change however predicting which technologies and renewable alternatives will be adopted depends on a number of factors that tend to be outside the control of investors, such as regulation, subsidies and the price of carbon.